Press release

LEM announces results for Q1 2019/20: robust profitability
maintained despite decline in sales
Fribourg, Switzerland, 30 July 2019 – LEM (SIX: LEHN), a leading global company in electricalmeasurement for industry and automotive applications, announces first quarter results for 2019/20(April-June) compared to 2018/19:•

Sales decreased by 6.1% to CHF 82.6 million (CHF 88.0 million); at constant exchange rates, sales
decreased by 3.6%

•The global spread of sales remains steady across different regions:– China CHF 29.7m (35.9% of total)– Europe CHF 25.1m (30.3% of total)– North America CHF 9.7m (11.7% of total)– Rest of World CHF 18.2m (22.0% of total)•

R&D up by 9.5% to CHF 7.1 million (CHF 6.5 million), or 8.6% of sales, to capture new opportunities•

EBIT decreased by 10.1% to CHF 16.7 million (CHF 18.5 million); the EBIT margin declined slightly
to 20.2% (21.1%)•Net profit for the period was up by 2.8% at CHF 13.9 million (CHF 13.5 million)

Frank Rehfeld, Chief Executive Officer, said: “This year’s first quarter sales suffer in comparison
with last year, which was exceptionally strong. It is important to recall that since then there has beenan economic slow-down in our key markets and an increasing hesitancy by customers to invest, due
in part to escalating trade disputes. China is our largest market, and our business there is impacted bychanges both in the economic environment and in government policies.
We remain encouraged by the fundamentals driving our business such as renewable energy and thecontinued transition to green cars across all parts of the world. Globally, electrical sensing products
are undergoing significant transformation, driven by new applications and technologies. In the shortterm, however, we anticipate that global economic uncertainties will continue to have a dampening
effect on our overall top line growth for this financial year.”

Andrea Borla, Chief Financial Officer, remarked: “We continue to improve the gross margin, up from
45.2% to 46.5%, thanks to various efficiency improvements. Our EBIT margin at 20.2% remains robust,even as we increased R&D investments by 9.5%, and our net profit margin rose from 15.3% to 16.8%.”

LEM Holding SA

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Industry segment: mixed performance
Q1 sales in the Industry segment totalled CHF 64.6 million, down 8.7%. At constant exchange rates,
sales decreased by 6.0%. Q1 last year was exceptionally strong but since then global economic
uncertainty means that customers are hesitating to invest across many sectors. Sales decreased by
7.4% in China, by 10.6% in Europe, by 2.0% in North America and by 10.8% in Rest of World.
in CHF millions

2019/202018/19

Change CommentsBusinesses
Drives27.0

32.1

Renewable
Energy21.0

22.1

Traction

14.0

13.8

High precision

2.7

2.8

• Growth in China and India-2.8% • Strong demand for EV car test benches• New products well received

Total Industry

64.6

70.8

-8.7%

-15.9% • China & Japan sluggish demand• US manufacturing sector demand solid-5.2% • Fundamentals are good
• Strongest in China & India+1.4% • Investments helped by government policies

Automotive segment: shift to green cars continues
Q1 sales in the Automotive segment totalled CHF 18.0 million, an increase of 4.2%. At constantexchange rates, sales increased by 6.1%. Sales in our green car business now accounts for 73.5% ofAutomotive sales, up from 63.2% a year ago. Although China remains the largest market, its economy
has shown signs of slowing and the green car business has been impacted by reduced consumer
confidence and by changes in government policies implemented this quarter. Europe is clearly seeing
the ramp-up of launches for new electric or hybrid vehicles, as is Korea and Japan, while the US is stilltransitioning from old technology. Sales increased by 3.6% in China, in Europe they were up by 30.4%
and rose by 38.2% in Rest of World, while in North America they declined by 36.6%.
in CHF millions

2019/20

2018/19

Businesses
Green

13.2

10.9

Conventional

4.8

6.4

Change Comments+21.3% • All markets continue to grow
• China influenced by policies• New motor control and charging systemproducts developed-25.0% • US passenger car sales continue to fall
• Old sensor technology being replaced as
anticipatedTotal Automotive

18.0

17.3

+4.2%

Profitability remains robustGross profit for the quarter fell by 3.5% to CHF 38.4 million, although the gross margin reached 46.5%,
which is 130 basis points higher than in Q1 last year. We continued to shift production to cost-effective
locations, and executed various efficiency programs, particularly along our supply chain.
We remain vigilant with overheads, and kept SG&A costs essentially flat at CHF 14.7 million(CHF 14.9 million). We continue with our long-term investment in future applications and increased
R&D investments by 9.5% to CHF 7.1 million (CHF 6.5 million), or 8.6% of sales (7.4%). EBIT dropped

LEM Holding SA

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by 10.1% to CHF 16.7 million (CHF 18.5 million), due to the decline in revenues partially offset by theincrease in gross margin. Our EBIT margin was slightly down at 20.2% (21.1%), and remains robustin the long-term.
We posted a net profit for the quarter of CHF 13.9 million, up 2.8% from CHF 13.5 million last year,
thanks to lower taxes from the confirmed status of our China operations as a High New Technology
Enterprise, as well as positive foreign exchange effects. The net profit margin was up at 16.8%
compared with 15.3%.

Financial calendar
The financial year runs from 1 April to 31 March
30 July 2019
First quarter results 2019/20
5 November 2019
Half-year results 2019/20
31 January 2020
9 months results 2019/20
19 May 2020
Full-year results 2019/20

LEM – Life Energy Motion
A leading company in electrical measurement, LEM engineers the best solutions for energy andmobility, ensuring that our customers’ systems are optimized, reliable and safe.
Our 1,500 people in over 15 countries transform technology potential into powerful answers. We
develop and recruit the best global talent, working at the forefront of mega trends such as renewableenergy, mobility, automation and digitization.
With innovative electrical solutions, we are helping our customers and society accelerate the transition
to a sustainable future.
Listed on the SIX Swiss Exchange since 1986, the company’s ticker symbol is LEHN.
www.lem.com
For further information please contact
Andrea Borla (CFO)
Phone: +41 22 706 1250
Email: investor@lem.com

LEM Holding SA

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Appendix
Consolidated income statement
April to June
2019/20in CHF thousands

2018/19

Change-6.1%

Sales

82’63588’049

Cost of goods sold(44’199)(48’235)

Gross margin

38’43539’814Gross margin (in %)

46.5%

45.2%

Sales expense(7’596)(7’735)Administration expense(7’093)(7’119)Research & development expense(7’130)(6’509)Other expense(0)0

Other income

5297

EBIT

16’668

18’548EBIT margin (in %)

20.2%

21.1%

Financial expense

(182)

(45)

Financial income

2728

Foreign exchange effect199(1’150)

Profit before taxes

16’712

17’381Income taxes(2’846)(3’894)

Net profit of the period

13’866

13’487

Net profit margin (in %)

16.8%

15.3%

LEM Holding SA-3.5%-10.1%

-3.8%

+2.8%

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Key Figures
2019/20in CHF millions

Orders received

Q1

Industry
Automotive
Total LEM

Q2

Q2

Q3

Q4

FY

71.3

68.0

56.6

57.5

63.6

245.7

+4.7%

+12.1%

17.2

17.9

23.5

15.1

18.2

74.7

-4.3%

-6.0%

88.4

86.0

80.0

72.6

81.8

320.5

+2.9%

+8.0%

Q1

Q1

Q2

Q3

Q4

FY

Q1 - Q1 Q1 - Q41.100.96

0.93

0.99

1.05

0.98

+14.7%+4.7%

Automotive

0.95

1.04

1.160.85

1.13

1.05

-8.1%

-15.7%

Total LEM

1.07

0.98

0.99

0.95

1.07

1.00

+9.6%

0.0%

Sales

Q1

Q1Q2

Q3

Q4

FY

Q1 - Q1 Q1 - Q4

Industry

64.6

70.8

60.8

58.3

60.4

250.2

-8.7%

+7.1%

Automotive

18.0

17.3

20.1

17.8

16.1

71.4

+4.2%

+11.6%

Total LEM

82.6

88.0

80.9

76.1

76.5

321.6

-6.1%

+8.0%

EBIT

Q1Q1Q2Q3Q4

FY

Industry

14.3

15.8

13.012.114.0

54.9-9.4%+1.9%

Automotive

2.4

2.84.03.20.09.9-14.5%

n.a.

Total LEM

16.7

18.5

17.0

15.2

14.0

64.8

-10.1%+18.8%Net profit

Q1

Total LEM

13.9

Q2

Q2

LEM Holding SA

Q3

Q3

Q4

Q4

Q4

FY

Q1 - Q1 Q1 - Q4

Industry

Q3

Q4

FY

Book-to-bill ratio

Q2

Q3

Q4

ChangeQ1

Q2

Q3

2018/19

FY

FY

FY

Q1 - Q1 Q1 - Q4

Q1

Q2

Q3

Q4

FY

Q1 - Q1 Q1 - Q4

13.5

13.8

11.6

13.4

52.4

+2.8%

+3.4%

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